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XTO REV PROD 88 (7-69) PAID UP (04/17/07)B
OIL, GAS AND MINERAL LEASE
THIS AGREEMENT made this 11th day of April, 2008 , between Leonard M. Quiroz Jr., and wife, Delores C. Quiroz, Lessor (whether one or
more), whose address is: 5912 Lubbock Avenue, Fort Worth, Texas, 76133-3315 and XTO Energy Inc., whose address is: 810 Houston St., Fort
Worth, Texas 76102, Lessee, WfTNESSETH:
1 . Lessor, in consideration of ten dollars and other valuable consideration, receipt of which is hereby acknowledged, and of the covenants and
agreements or Lessee hereinafter contained, does hereby grant, lease and let unto Lessee the land covered hereby for the purposes and with the
exclusive right of exploring, drilling, mining and operating for, producing and owning oil, gas, sulphur and all other minerals (whether or not similar to
those mentioned), together with the right to make surveys on said land, lay pipe lines, establish and utilize facilities for surface or subsurface
disposal of saltwater, construct roads and bridges, dig canals, build tanks, power stations, telephone lines, employee houses and other structures
on said land, necessary or useful in Lessee's operations in exploring, drilling for, producing, treating, storing ana transporting minerals produced
from the land covered hereby or any other land adjacent thereto. The land covered hereby, nerein called "said land," is located in the County of
TARRANT , State of Texas, and is described as follows:
BEING 0.3335 acres of land, more or less, out of the J.M.B. Smith Survey, A-1412, Tarrant County, Texas, Being Lot 13, Block 19, of SOUTHWEST
HILLS ADDITION, an addition to the City of Fort Worth, Tarrant County, Texas, according to the Plat thereof recorded in Volume 388-34, Page 29, of
the Deed Records of Tarrant County, Texas.
This lease also covers and includes, in addition to that above described, all land, if any, contiguous or adjacent to or adjoining the land above
described and (a) owned or claimed by Lessor by limitation, prescription, possession, reversion, after-acquired title or unrecorded instrument or (b)
as to which Lessor has a preference right of acquisition. Lessor agrees to execute any supplemental instrument requested by Lessee for a more
complete or accurate description of said land. For the purpose of determining the amount of any bonus or other payment hereunder, said land shall
be deemed to contain 0.3335 acres, whether actually containing more or less, and the above recital of acreage in any tract shall be deemed to
be the true acreage thereof. Lessor accepts the bonus as lump sum consideration for this lease and all rights and options hereunder.
2. Unless sooner terminated or longer kept in force under other provisions hereof, this lease shall remain in force for a term of
3 y ears from the date hereof, hereinafter called "primary term," and as long thereafter as operations, as hereinafter defined, are
conducted upon said land with no cessation for more than ninety (93) consecutive days.
3. As royalty, Lessee covenants and agrees: (a) To deliver to the credit of Lessor, in the pipe line to which Lessee may connect its wells, the
equal 25% part of all oil produced and saved by Lessee from said land, or from time to time, at the option of Lessee, to pay Lessor the
average posted market price of such 25% part of such oil at the wells as of the day it is run to the pipe line or storage tanks, Lessor's
interest, in either case, to bear 25% of the cost of treating oil to render it marketable pipe line oil; (b) To pay Lessor on gas and
casinghead gas produced from said land 1 1 ) when sold bv Lessee. 25% of the amount realized by Lessee, computeciat the
mouth of the well, or (2) when used by Lessee off said land or in the manufacture of gasoline or other products, the market value, at the mouth of
the well, of 25% of such gas and casinghead gas; (c) To pay Lessor on all other minerals mined and marketed or utilized by Lessee from said
land, one-tenth either in kind or value at the well or mine at Lessee's election, except that on sulphur mined and marketed the royalty shall be one
dollar ($1 .00) per long ton. If, at the expiration of the primary term or at any time or times thereafter, there is any well on said land or on lands
with which said land or any portion thereof has been pooled, capable of producing oil or gas and all such wells are shut-in, this lease shall,
nevertheless, continue in force as though operations were being conducted on said land for so long as said wells are shut-in, and thereafter this
lease may be continued in force as rf no shut-in had occurred. Lessee covenants and agrees to use reasonable diligence to produce, utilize or
market the minerals capable of being produced from said wells, but in the exercise of such diligence, Lessee shall not be obligated to install or
furnish facilities other than well facilities and ordinary lease facilities of flow lines, separator, and lease tank, and shall not be required to settle labor
trouble or to market gas upon terms unacceptable to Lessee. If, at any time or times after the expiration of the primary term, all such wells are
shut-in for a period of ninety consecutive days, and during such time there are no operations on said land, then at or before the expiration of said
ninety day period, Lessee shall pay or tender, by check or draft of Lessee, as royalty, a sum equal to one dollar ($1 .00) for each acre of land then
covered hereby. Lessee shall make like payments or tenders at or before the end of each anniversary of the expiration of said ninety day period if
upon such anniversary this lease is being continued in force solely by reason of the provisions of this paragraph. Each such payment or tender
shall be made to the parties who at the lime of payment would be entitled to receive the royalties which would be paid under this lease if the
wells were producing, and may be deposited in such bank as directed by Lessor, or its successors, which shall continue as the depositories,
regardless of changes in the ownership of shut-in royalty. If at any time that Lessee pays or tenders shut-in royalty, two or more parties are, or
claim to be, entrHecTto receive same. Lessee may, in lieu of any other method of payment herein provided, pay or tender such shut-in royalty, in
the manner above specified, either jointly to such parties or separately to each in accordance with their respective ownerships thereof, as Lessee
may elect. Any payment hereunder may be made by check or draft of Lessee deposited in the mail or delivered to the party entitled to receive
payment or to a depository bank provided for above on or before the last date for payment. Nothing herein shall impair Lessee's right to release as
provided in paragraph 5 hereof. In the event of assignment of this lease in whole or in part, liability Tor payment hereunder shall rest exclusively on
the then owner or owners of this lease, severally as to acreage owned by each.
4. Lessee is hereby granted the right, at its option, to pool or unitize any land covered by this lease with any other land covered by this lease,
and/or with any other land, lease, or leases, as to any or all minerals or horizons, so as to establish units containing not more than 80 surface acres,
plus 10% acreage tolerance; provided, however, units may be established as to any one or more horizons, or existing units may be enlarged as to
any one or more horizons so as to contain not more than 640 surface acres plus 1 0% acreage tolerance, if limited to one or more of the following:
(1) gas, other than casinghead gas, (2) liquid hydrocarbons (condensate) which are not liquids in the subsurface reservoir, (3) minerals produced
from wells classified as gas wells by the conservation agency having jurisdiction. If larger units than any of those herein permitted, either at the
time established, or after enlargement, are permitted or required under any governmental rule or order, for the drilling or operation of a well at a
regular location, or for obtaining maximum allowable from any well to be drilled, drilling, or already drilled, any such unit may be established or
enlarged to conform to the size permitted or required by such governmental order or rule. Lessee shall exercise said option as to each desired unit
by executing an instrument identifying such unit and filing it for record in the public office in which this lease is recorded. Such unit shall become
effective as of the date provided for in said instrument or instruments but if said instrument or instruments make no such provision, then such unit
shall become effective on the date such instrument or instruments are so filed of record. Each of said options may be exercised by Lessee at any
time and from time to time while this lease is in force, and whether before or after operations or production has been established either on said
land, or on the portion of said land included in the unit, or on other land unitized therewith. A unit established hereunder shall be valid and effective
for all purposes of this lease even though there may be mineral, royalty, or leasehold interests in lands within the unit which are not effectively
pooled or unitized. Any operations conducted on any part of such unitized land shall be considered, for all purposes, except the payment of
royalty, operations conducted upon said land under this lease. There shall be allocated to the land covered by this lease within each such unit (or
to each separate tract within the unit if this lease covers separate tracts within the unit) that proportion of the total production of unitized
minerals from the unit, after deducting any used in lease or unit operations, which the number of surface acres in such land (or in each such
separate tract) covered by this lease within the unit bears to the total number of surface acres in the unit, and the production so allocated shall be
considered for all purposes, including payment or delivery of royalty, overriding royalty and any other payments out of production, to be the entire
production of unitized minerals from the land to which allocated in the same manner as though produced therefrom under the terms of this lease.
The owner of the reversionary estate of any term royalty or mineral estate agrees that the accrual of royalties pursuant to this paragraph or of
shut-in royalties from a well on the unit shall satisfy any limitation of term requiring production of oil or gas. The formation of any unrtnereunder
which includes land not covered by this lease shall not have the effect of exchanging or transferring any interest under this lease (including, without
limitation, any shut-in royalty which may become payable under this lease) between parties owning interests in land covered by this lease and
parties owning interests in land not covered by this lease. Neither shall it impair the right of Lessee to release as provided in paragraph 5 hereof,
except that Lessee may not so release as to lands within a unit while there are operations thereon for unitized minerals unless affpooled leases
are released as to lands within the unit. At any time while this lease is in force Lessee may dissolve any unit established hereunder by filing for
record in the public office where this lease is recorded a declaration to that effect, if at that time there is no unitized minerals being produced from
such unit. Any unit formed may be amended, re-formed, reduced or enlarged by Lessee at its election at any time and from time to time after the
original forming thereof by filing an appropriate instrument of record in the public office in which the pooled acreage is located. Subject to the
provisions of this paragraph 4, a unit once established hereunder shall remain in force so long as any lease subject thereto shall remain in force. If
this lease now or hereafter covers separate tracts, no pooling or unitization of royalty interests as between any such separate tracts is intended
or shall be implied or result merely from the inclusion of such separate tracts within this lease but Lessee shall nevertheless have the right to
pool or unitize as provided in this paragraph 4 with consequent allocation of production as herein provided. As used in this paragraph 4, the
words "separate tract" mean any tract with royalty ownership differing, now or hereafter, either as to parties or amounts, from that as to any other
part of the leased premises.
5. Lessee may at any time and from time to time execute and deliver to Lessor or file for record a release or releases of this lease as to any
part or all of said land or of any mineral or horizon thereunder, and thereby be relieved of all obligations, as to the released acreage or interest.
6. Whenever used in this lease the word "operations" shall mean operations for and/or any of the following: drilling, testing, completing,
reworking, recomputing, deepening, sidetracking, plugging back or repainng of a well in search for or in an endeavor to obtain production of oil,
gas, sulpnur or other minerals, excavating a mine, production of oil, gas, sulphur or other mineral, whether or not in paying quantities.
7. Lessee shall have the use, free from royalty, of water, other than from Lessor's water wells, and of oil and gas produced from said land in ail
operations hereunder. Lessee shall have the nght at any time to remove all machinery and fixtures placed on said land, including the right to draw
and remove casing. No well shall be drilled nearer than 200 feet to the house or bam now on said land without the consent of the Lessor. Lessee
shall pay for damages caused by its operations to growing crops and timber on said land.
8. The rights and estate of any party hereto may be assigned from time to time in whole or in part and as to any mineral or horizon. All of the
covenants, obligations, and considerations of this lease shall extend to and be binding upon the parties hereto, their heirs, successors, assigns,
and successive assigns. No change or division in the ownership of said land, royalties or other moneys, or any part thereof, howsoever effected,
shall increase the obligations or diminish the rights of Lessee, including, but not limited to, the location and drilling of wells and the measurement
of production. Notwithstanding any other actual or constructive knowledge or notice thereof of or to Lessee, its successors or assigns, no
change or division in the ownership of said land or of the royalties, or other moneys, or the right to receive the same, howsoever effected, shall
be binding upon the then record owner of this lease until sixty (60) days after there has been furnished to such record owner at his or its principal
place of business by Lessor or Lessor's heirs, successors, or assigns, notice of such change or division, supported by either originals or duly
certified copies of tie instruments which have been properly filed for record and which evidence such change or division, and of such court
records and proceedings, transcripts, or other documents as shall be necessary in Hie opinion of such recora owner to establish the validity of
such change or division. If any such change in ownership occurs by reason of the death of the owner, Lessee may, nevertheless pay or tender
such royalties, or other moneys, or part thereof, to the credit of the decedent in a depository bank provided for above.
9. In the event Lessor considers that Lessee has not complied with all its obligations hereunder, both express and implied, Lessor shall notify
Lessee in writing, setting out specifically in what respects Lessee has breached mis contract. Lessee shall then have sixty (60) days after receipt
of said notice within which to meet or commence to meet all or any part of the breaches alleged by Lessor. The service of said notice shall be
precedent to the bringing of any action by Lessor on said lease for any cause, and no such action shall be brought until the lapse of sixty (60) days
after service of such notice on Lessee. Neither the service of said notice nor the doing of any acts by Lessee aimed to meet all or any of the
alleged breaches shall be deemed an admission or presumption that Lessee has failed to perform all its obligations hereunder. If this lease is
canceled for any cause, it shall nevertheless remain in force and effect as to (1 ) sufficient acreage around each well as to which there are operations
to constitute a drilling or maximum allowable unit under applicable governmental regulations, (but in no event less that forty acres), such acreage
to be designated by Lessee as nearly as practicable in trie form of a square centered at the well, or in such shape as then existing spacing rules
require; and (2) any part of said land included in a pooled unit on which there are operations. Lessee shall also have such easements on said land
as are necessary to operations on the acreage so retained and shall not be required to move or remove any existing surface facilities necessary
or convenient for current operations.
10. Lessor hereby warrants and agrees to defend title to said land against the claims of all persons whomsoever. Lessor's rights and
interests hereunder shall be charged pnmarify with any mortgages, taxes or other liens, or interest and other charges on said land, but Lessor
agrees that Lessee shall have the right at any time to pay or reduce same for Lessor, either before or after maturity and be subrogated to the
rights of the holder thereof and to deauct amounts so paid from royalties or other payments payable or which may become payable to Lessor
and/or assigns under this lease. If this lease covers a less interest in the oil, gas, sulphur, or other minerals in all or any part of said land than the
entire and undivided fee simple estate (whether Lessor's interest is herein specified or not), or no interest therein, then the royalties and other
moneys accruing from any part as to which this lease covers less than such full interest, shall be paid only in the proportion which the interest
therein, if any, covered by this lease, bears to the whole and undivided fee simple estate therein. All royalty interest covered by this lease (whether
or not owned by Lessor) shall be paid out of the royalty herein provided. This lease shall be binding upon each party who executes ft without
regard to whether it is executed by all those named herein as Lessor.
1 1 . If, while this lease is in force, at, or after the expiration of the primary term hereof it is not being continued in force by reason of the shut-in
well provisions of paragraph 3 hereof, and Lessee is not conducting operations on said land by reason of (1) any law, order, rule or regulation,
(whether or not subsequently determined to be invalid) or (2) any other cause, whether similar or dissimilar, (except financial) beyond the
reasonable control of Lessee, the primary term hereof shall be extended until the first anniversary date hereof occurring ninety (90) or more
days following the removal of such delaying cause, and this lease may be extended thereafter by operations as if such delay had not occurred.
1 2. Lessor agrees that this lease covers and includes any and all of Lessor's rights in and to any existing well(s) and/or wellbore(s) on said
land, other than existing water wells, and for all purposes of this lease the re-entry and use by Lessee of any existing well and/or weJIbore shall be
deemed the same as the drilling of a new well.
13. Notwithstanding anything to the contrary contained in this lease, at the option of Lessee, which may be exercised by Lessee
giving notice to Lessor, a well which has been drilled and Lessee intends to frac snail be deemed a well capable of producing in paying
quantities and the date such well is shut-in shall be when the drilling operations are completed.
14. As a result of land development in the vicinity of said land, governmental rules or ordinances regarding well sites, and/or surface
restrictions as may be set forth in this lease and/or other leases in the vicinity, surface locations for well sites in the vicinity may be limited
and Lessee may encounter difficulty securing surface location(s) for drilling, reworking- or other operations. Therefore, since drilling,
reworking or other operations are either restricted or not allowed on said land or otheneases in the vicinity, it is agreed that any such
operations conducted at a surface location off of said land or off of lands with which said land are pooled in accordance with this lease,
provided that such operations are associated with a directional well for the purpose of drilling, reworking, producing or other operations
under said land or lands pooled therewith, shall for purposes of this lease be deemed operations conducted on said land. Nothing
contained in this paragraph is intended to modify any surface restrictions or pooling provisions or restrictions contained in this lease,
except as expressly stated.
15. This is a non-development Oil, Gas and Mineral Lease, whereby Lessee, its successors or assigns, shall not conduct any
operations, as defined herein, on the surface of said lands. However, Lessee shall have the right to pool or unitize said lands, or part
thereof, with other lands to comprise an oil and/or gas development unit.
For additional provisions hereof, see Exhibit "A" attached hereto and made a part hereof.
IN WITNESS WHEREOF, this instrument is executed on the date first above written.
Delores C. Quiroz
STATE OF TEXAS
(ACKNOWLEDGMENT FOR INDIVIDUAL)
COUNTY OF TARRANT
This instrument was acknowledged before me on the . day of A~P^WL_ 2008 by Leonard M. Quiroz Jr., and wife, Delores C. Quiroz.
My commission expires:
After Recording Return To:
C/o Carla Petroleum, Inc
16990 Dallas Parkway, #126
Dallas. Texas 75248
Attached to and made a part of that certain Oil, Gas and Mineral Lease dated April 11, 2008, by and between
Leonard M. Quiroz Jr., and wife, Delores C. Quiroz , as Lessor(s), and XTO Energy Inc., as Lessee.
Lessee is hereby given the option to extend the primary term of this lease for an additional two (2) years from the expiration of the original
primary term hereof. This option may be exercised by Lessee at any time during the original primary term by paying the sum of Ten
Thousand and 00/1 00 Dollars ($1 0,000.00) per acre to Lessor or to the credit of Lessor in the depository named above (which bank and its
successors are Lessor's agents and shall continue as the depository regardless of changes in ownership of said land). This payment shall
be based upon the number of net mineral acres then covered by this lease and not at such time being maintained by other provisions
hereof. This payment may be made by the check or draft of Lessee mailed or delivered to Lessor or to said bank at any time during the
original primary term hereof. If such bank (or any successor bank) should fail, liquidate or be succeeded by another bank, or for any
reason fail or refuse to accept payment, Lessee shall not be held in default for failure to make such payment until thirty (30) days after
Lessor's delivery to Lessee of & proper recordable instrument naming another bank as agent to receive such payment. If, at the time this
payment is made, various parties are entitled to specific amounts according to Lessee's records, this payment may be divided between
said parties and paid in the same proportion. Should this option be exercised as herein provided, it shall be considered for all purposes as
though this lease was originally provided for a primary term of Five (5) years.
End of Exhibit "A"
SIGNED FOR IDENTIFICATK
Delores C. Quiroz
CARLA PETROLEUM, INC
ATTN: EDDIE CORNELIUS
16990 DALLAS PARKWAY # 126
DALLAS TX 75248
Submitter: CARLA PETROLEUM INC
TARRANT COUNTY CLERK
TARRANT COUNTY COURTHOUSE
100 WEST WEATHERFORD
FORT WORTH, TX 76196-0401
DO NOT DESTROY
WARNING - THIS IS PART OF THE OFFICIAL RECORD.
Filed For Registration: 05/08/2008 02:08 PM
Instrument #: D208170735
LSE 4 PGS $24.00
ANY PROVISION WHICH RESTRICTS THE SALE, RENTAL OR USE
OF THE DESCRIBED REAL PROPERTY BECAUSE OF COLOR OR
RACE IS INVALID AND UNENFORCEABLE UNDER FEDERAL LAW.
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